Billionaire investor Carl Icahn pledged $20 million on Thursday to keep Atlantic City’s Taj Mahal casino open indefinitely, eliminating a plan to shut it down Saturday, AP said on December 19.
In a letter dated Thursday, Icahn promised Trump Entertainment Resorts that he would provide enough money to keep the casino open throughout bankruptcy proceedings.
“Many people would still argue that it would be a better financial decision for me to let the Taj close and wait to see whether a global settlement can be reached, ” Icahn wrote to Trump Entertainment CEO Robert Griffin. “But I cannot be so callous as to let 3, 000 hardworking people lose their jobs, ” the report said.
His letter came shortly after the main Atlantic City casino workers’ union said Icahn told them he was pulling out of a proposed deal on the casino’s future operations. Bob McDevitt, president of Local 54 of the Unite-HERE union, said Icahn refused to sign a deal that already had been signed by the union and Trump Entertainment, AP said.
The union is pressing an appeal of an October bankruptcy court order that terminated health insurance and pension coverage for Taj workers. For months, the company has insisted that the union withdraw the appeal or else it would close the casino. But two threatened shutdown dates came and went, the report said.The deal Icahn declined to sign would have restored contract terms that were in effect before the court-ordered cost-cutting package.
Icahn said there were numerous reasons for him to walk away from the casino.
“Trump Entertainment Resorts Inc. is one of the most distressed companies I have ever come across in my 50-plus years of investing, ” he wrote. “The company’s hometown of Atlantic City is in the midst of an unprecedented crisis. Intense competition from surrounding markets is steadily eroding gaming revenues for the city’s casinos. At the same time, relative to those surrounding markets, the costs of operating a casino in Atlantic City continue to escalate. As a result, four local casinos shuttered in 2014, and a once vibrant Atlantic City institution, your Taj Mahal, loses almost $10 million every month.”
The company plans to hand itself over to Icahn, but only if he gets substantial tax breaks. Bills that would have done so were yanked from the state Legislature on Thursday, AP said.